Rule 16 of cenvat credit rules, 2004 provides transition provisions by. Rule 47 of cenvat credit rules, 2004 pre budget scenario. Natarajan, advocate, swamy associates the intention behind the move to rewrite rule 6 of the cenvat credit rules, 2004, to make it more user friendly, more liberal and more clear is laudable. Draft rule for issue of credit transfer document to be. In rule 10, in case of transfer of business, change in ownership on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture, there is a provision of transfer of cenvat credit remaining unutilized but the time limit of permission to be given by the department was not specified but by this notification. Following persons are eligible for cenvat credit under rule 31 of ccr. An assessee who is a manufacturer of dutiable goods or provider of output services or both invariably receives services on which he pays service tax and is eligible to take credit in terms of rule 31 of the cenvat credit rules, 2004. Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted waivedoff under rule 21 of central excise rules, 2002, the cenvat credit taken on inputs used in the manufacture or production shall be reversed. Documents for availing cenvat credit some issues the cenvat credit rules, 2004 allows the manufactureroutput service provider to take credit on the dutyservice tax paid on inputinput services against the dutyservice tax paid by him to the credit of the central government. It was a general understanding that department was wrongly interpreting this term to disallow genuine cenvat credit taken by the assessees in case of such services which. Rule 41 cenvat credit in respect of input to be claimed within six months from the duty paying document. Chapter9 proportionate credit mechanism and other issues. May 26, 2016 2 of 29 overview of rule 6 of cenvat credit rules, 2004 understanding rule 63 instances where rule 63 is applicable methodology to reverse common cenvat credit understanding rule 63i case studies for rule 63i understanding rule 63ii 63a case study for rule 63ii 63a old vs new rule 63 discussion items.
In the cenvat credit rules, 2004 hereinafter referred to as the said rules, in rule 4. As of now, rule 47 of the cenvat credit rules allows cenvat credit in respect of input service on or after the day on which the invoice, bill or challan as the case may be referred to in rule 9 is received. But unfortunately, the rule in its amended form is capable of fomenting more confusions than its erstwhile version. Despite not being a proper valid document in terms of rule 9 1 of cenvat credit rules, 2004 and cbec circular no. Form a application for refund of cenvat credit under rule. Rule 9 of the cenvat credit rules, 2004 shall be also amended to include credit transfer document in the list of documents using which credit can be availed subject to the condition that such credit transfer document is issued after the appointed date and within thirty days of the. A new rule 7 has been substituted in the cenvat credit rules, 2004 ccr, 2004 dealing with distribution of cenvat credit of service tax paid on input services, by an input service distributor isd. Download cenvat credit rules, 2004 file in pdf format. Provided that nothing contained in these rules relating to availment and utilization of credit.
The provider of output service, availing cenvat credit referred to in sub rule 9 or the input service distributor referred to in sub rule 10, as the case may be, may submit a revised return to correct a mistake or omission within a period of. Apr 14, 2016 the other option in such circumstances is to pay an amount determined as per rule 3a, vide rule 632 of the cenvat credit rules 2004, which allows reversal of proportionate cenvat credit taken. Any amount of credit earned by a mfp under ccr 02 as they existed prior to the 10 9 2004 or by a osp under the stcr, as they existed prior to the 10 9 2004, and remaining unutilised on that day shall be allowed as cenvat credit to such mfposp under these rules, and shall be allowed to be utilised in accordance with ccr 04. Qtrly return form quarterly return for first stage second stage dealer or the registered importer under see sub rule 8 of rule 9. Credit rules, 2002, except as respects things done or omitted to be done before such supersession, the central government hereby makes the following rules, namely. Cenvat credit rules, 2004 superseded the earlier set off schemes to provide cross sectional availment and utilization of credit under excise and service tax. Sub rule 2 of rule 9 provides that, no cenvat credit under subrule 1 shall be taken unless all the particulars as prescribed under the central excise rules.
Natarajan, advocate, swamy associates the following sub rule 4 of rule 6 of cenvat credit rules, 2004 has been introduced with effect from 01. Rule 41 cenvat credit in respect of input to be claimed within six months from the duty paying document with effect from 01. The union government made changes to the old cenvat credit rules of 2002, putting in place new cenvat credit rules by exercising their powers under the central excise act of 1944. Rule 9 of the cenvat credit rules, 2004, provides various provision for documents and accounts for the purpose of cenvat credit. The same is in supersession of cenvat credit rules, 2002 ccr 02 and service tax credit rules, 2002 stcr. Return registered dealer quarterly return under rule 9 of the cenvat credit rules, 2004 for the registered dealers see sub rule 8 of rule 9. The central government amends rule 3 of the cenvat credit rules, 2004 10 january 2014 background the sub rules 5, 5a, 5b and 5c of rule 3 of the cenvat credit rules, 2004 prescribes the provisions relating to treatment of cenvat credit availed, under the aforesaid circumstances. In exercise of the powers conferred by rule 5 of the cenvat credit rules, 2004 hereinafter referred to as the said rules, and in supersession of the notification of the government of india in the ministry of finance department of revenue, no 52006. Cenvat credit rules, 2004 ccr 2004 have been notified vide notification no. Rule 9 of the cenvat credit rules, 2004 shall be also amended to include credit transfer document in the list of documents using which credit can be availed subject to the condition that such credit transfer document is issued after the appointed date and within thirty days of the appointed date. Summary of service tax rule with charts ca club of india.
Credit in 1986 followed by modvat in 1987 and then cenvat credit rules, 2001. Scope of exempted services for reversal of cenvat credit under rule 6 of the credit rules alarming bell the union budget 2016 has witnessed revamp changes in the cenvat credit rules, 2004 the credit rules amongst many other changes brought in the arena of indirect taxes. Reversal of cenvat credit rule 35bc indian tax updates. Cenvat credit means a scheme where the manufacturers or the output service providers are allowed a setoff of the taxes paid on the inputs or the input services that are used while manufacturing the final products or providing the output service. Similarly, interest has also been considerably increased. In the present paper, we are going to deal with refund under rule 5 of cenvat credit rules, 2004 as a manufacturer and related provisions. Documents, record and returns mandatory for cenvat credit. A manufacturer can file claim for refund with regard to finished goods in accordance with rule 5 of cenvat credit rules, 2004. Some of important rules under cenvat credit rules, 2004. Rule 35c sub rule 5c of rule 3 of the cenvat credit rule 2004, provides that. The relevant extract of rule 47 of cenvat credit rules, 2004 before amendment, reads as follows. Scope of exempted services for reversal of cenvat credit.
For ready reference the new rule 7 is reproduced below. In the cenvat credit rules, 2004 hereinafter referred to as the said rules in rule 4, for sub rule 7, the following sub rule shall be substituted, namely. Amendment in rule 6 and rule 10 of cenvat credit rules 2004. Changes in cenvat credit rules, 2004 and its impact. Rule 9 1e of cenvat credit rules, 2004 which deals with document required for availing cenvat credit when tax is paid by service recipient has been amended w. Application for refund of cenvat credit under rule 5 of the cenvat credit rules, 2004. Availmentutilisation of cenvat credit a provider of taxable services can, in terms of rule 4 of the cenvat credit rules, 2004 avail credit of excise duty paid on inputs and capital goods and service tax paid on any input service.
Provided that provisions of this subrule shall apply mutatis mutandis to an importer who issues an invoice on which cenvat credit can be taken. A total of 16 rules are mentioned under this provision, each one containing information relevant to a certain topic. This credit can be utilized to pay excise duty on final products service tax on output services in accordance with the conditions and restrictions prescribed in cenvat credit rules, 2004. The central government amends rule 3 of the cenvat credit. Provided that nothing contained in these rules relating to availment and utilization of credit of service tax shall apply to the state of jammu and kashmir. Time limit for availment of credit limitless issues. Cenvat credit rules, 2004 eximkey india dgft, customs, excise.
A critical study sagar mal pareek penal provisions and interest related new provisions in service tax have been made more stringent by the finance act, 2011 including prosecution. Provided that nothing contained in these rules relating to availment and utilization of credit of service tax shall apply to. Cenvat credit rule 3 rule 34 utilization of cenvat credit restriction on utilization in certain cases credit available upto last day of month can be utilized for payment of duty for that month payment of nccd, additional duty of excise us. Oct 26, 2012 rule 35c sub rule 5c of rule 3 of the cenvat credit rule 2004, provides that. May 26, 2016 in exercise of the powers conferred by section 37 of the central excise act, 1944 1 of 1944 and section 94 of the finance act, 1994 32 of 1994 and in supersession of the cenvat credit rules, 2002 and the service tax credit rules, 2002, except as respects things done or omitted to. Amendment in rule 9a now provider of output services also requires to file an annual return for each financial year, by the 30th day of november of the succeeding year. May 26, 2016 the cenvat credit rules 2004 as amended by notification no. Some of important rules under cenvat credit rules, 2004 are.
A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed. As per sub rule 1 of rule 3, a manufacturer or an output service provider can take cenvat credit of i basic excise duty. Rule 9 documents and accounts cenvat credit rules, 2004 form no. Union indirect taxes central excise and service tax cag. Rule 9 documents and accounts cenvat credit rules, 2004. Changes in rule 63of the cenvat credit rules with effect. Cenvat credit rules, 2004 ccr 04 have been notified vide notification no. Sub rule 2 of rule 9 provides that, no cenvat credit under sub rule 1 shall be taken unless all the particulars as prescribed under the central excise rules, 2002 or the service tax rules, 1994, as the case may be. Provisions of rule 94 of the credit rules applicable to first stage dealer or second stage dealer shall also apply mutatis mutandis to importer who issues an invoice on which cenvat credit can be taken w. Provided also that the manufacturer or the provider of output service shall not take cenvat credit after six months of the date of issue of any of the documents specified in subrule 1 of rule 9. Eximkey india dgft, customs, excise, export import policy. Rule 91 of cenvat credit rules prescribes that cenvat credit can be taken on. Form a application for refund of cenvat credit under. The credit can be utilised towards payment of service tax subject to the fulfilment of certain conditions.
Reasonable steps in cenvat credit rules signals of coming. An identical proviso extracted as above has been added to subrule 7 of rule 4 of the ccr, 2004, which deals with input services. As per this rule credit may be utilized for payment of a any duty of excise on any final products or b an amount equal to cenvat credit taken on inputs if such inputs are removed as such or after being partially processed. Form a application for refund of cenvat credit under rule 5 of the cenvat credit rules, 2004 form a. The salient features of this rule is explained below through faq. Provided that for the year 200405, such information shall be. Cenvat credit after six months of the date of issue of any of the documents specified in sub rule 1 of rule 9. Rule 6 of the cenvat credit rules 2004, notification number 2016central excise, dated 01. This transfer can be made at the end of each quarter by making an entry for the same in the documents maintained under rule 9. Prosecution provisions 1 whoever commits any of the following offences, namely. Credit on inputs capital goods whether penalty under this rule of rs 2000 is the maximum penalty or minimum penalty. In exercise of the powers conferred by section 37 of the central excise act, 1944 1 of 1944 and in supersession of the cenvat credit rules, 2004, except as respects things done or omitted to be done before such supersession, the central government hereby makes the following rules, namely. Amendment in rule 47 cenvat credit in respect of input. In the said rules, in rule 9, in subrule 4, the following proviso shall be inserted at the end, namely.
In the cenvat credit rules, 2004 hereinafter referred to as the said rules in rule 4, for subrule 7, the following subrule shall be substituted, namely. Changes in cenvat credit rule 41 and rule 47 from 01. Summary of service tax rule with charts successful people dont do different things. The cenvat credit rules, 2004 has always been an evolving. Mar, 2007 rule 9 of the cenvat credit rules, 2004, provides various provision for documents and accounts for the purpose of cenvat credit. Further, a transfer challan shall also be issued which will contain the registration no.